Last week, the main CF2009 contract of Zheng cotton futures fell below the 12,000 yuan/ton mark, and continued to fall to 11,875 yuan/ton before noon on the 20th. This has once again brought trouble to cotton ginners and trading companies that have been suffering recently. Shipping opportunities. From the market inquiry on the 20th, we learned that cotton companies, large and small, and whether they operate domestic cotton or imported cotton, have seized the time to distribute quotations and look for cooperation orders.
In mid-to-early July, Zheng cotton prices Although the upward movement of the shock has boosted the confidence of upstream and downstream players in the cotton industry, the actual spot transaction performance has been relatively deserted. Especially for orders operated on the basis of the 2009 contract, the number of transactions dropped even more obviously. According to feedback from some cotton traders and cotton textile companies, there is now a widespread lack of orders from textile mills and poor spinning profits. Many companies are already selling yarn at a loss. The rising price of raw cotton will further compress the profit margin of cotton yarn.
Compared with companies that produce polyester-cotton yarn and rayon yarn, companies that produce pure cotton yarn are under greater operating pressure because the recent price increase of cotton raw materials is greater than that of other chemical fiber raw materials. However, the price of pure cotton yarn products has not increased, and some have even reduced prices and sold goods. Therefore, most textile companies are concentrating on digesting raw material inventories and waiting for lint prices to drop before replenishing them. Today, Zheng cotton broke through the 11,900 yuan/ton mark, and the willingness of textile companies to place orders increased significantly, which also prompted traders to actively quote for shipments.
In addition to the low replenishment of cotton mills that drives cotton companies to actively quote prices, part of the reason is that the market is cautious about the recovery of downstream demand due to the impact of the epidemic this year. Now that there are nearly two months left before the Golden Nine and Silver Ten, cotton-related traders can only try to speed up shipments and withdraw funds in a timely manner in order to be safe. In addition, according to the current inquiry and procurement standards, inquiries from spinners are mostly based on mid- to high-grade Xinjiang cotton with low impurities in mainland warehouses; from the perspective of procurement scale, most of the inquiries are for bulk orders. Therefore, as cotton companies focus on accelerating the shipment process, fierce competition is unavoidable. Traders and textile mills should make trading plans based on existing inventory and funds held, and balance risk prevention and control through destocking and restocking in a timely manner. </p
